The Washington Post’s Wonkblog presented a good summary this week of the intersecting factors contributing to steep declines in workforce participation. They identified three different dynamics at work, but unfortunately they left out one really important statistic that helps tie them all together. Without that one additional factor, it is tough to appreciate what we are experiencing or to recognize the policy demands created by this transformation.
The article points out that declining workforce participation is influenced by:
1) Demographics – the Baby Boom generation is retiring. In fact, almost all of the decline since 2011 is attributable to retirements.
2) Economic weakness – many of the long-term unemployed are simply giving up their careers, falling into poverty or leaning on family where possible.
3) Social Security disability – related to both of the two other factors, many more people than before are applying for and receiving permanent disability status.
What these factors overlook is the larger set of structural forces that are going to drive down workforce participation further, even after a full economic recovery. The best clue to this factor comes from examining long-term workforce participation in the most affluent segment of our population: white males.
Labor force participation by adult white men has been on a continuous steep decline since we started measuring it in the 1940’s. It’s not because white folks are so shiftless. It’s because we’ve been getting richer.
The length of a productive career, as a percentage of a lifetime, has been dropping steadily as capitalism advances and that process has accelerated dramatically since the rise of global capitalism a generation ago. Yes, there are fewer jobs available at the low end of the economic spectrum than there were fifty years ago, but that’s not the only dynamic at work. A productive, successful career starts later and ends earlier than it ever has. Our most lucrative careers don’t crank up until a worker is nearly thirty and they taper off to more or less voluntary work, or entrepreneurship, about twenty years later.
White males have been the first to experience this transformation because they have traditionally enjoyed the greatest access to the best careers, but this transformation is spreading through the rest of the culture. We are seeing a steeper shift right now because of an unusually weak economy and the beginning of the Baby Boom retirement cycle. However, declining workforce participation rates are likely to continue even as the economy recovers. Understanding this dynamic changes the range of relevant policy approaches pretty dramatically.